Uber must pay all of its taxes

Jo Maugham QC recently launched a crowdjustice fundrasing campaign to force Uber into court surrounding their VAT status. 

This is the latest in a long line of court cases against the tech behemoth. 

The QC who specialises in tax litigation has managed to raise over £100,000 so far in the quest to do what the HMRC seem to be unable to do.

Maugham QC said to his financial pledgers "The contention that underlies my case against Uber – that it is it and not its drivers who are supplying transportation services – received a significant boost on Friday with the decision of the Employment Appeal Tribunal confirming that Uber is engaging workers and supplying transportation services. This is a powerful vindication of the decision to seek to do HMRC's job and pursue Uber where it will not.

"More difficult has been how, in practice, to advance a claim against Uber worth over £1bn in avoided VAT with a budget of a little over £100,000 in a setting where the loser is liable to the winner's costs. My strategy to address this was two-fold.

"First, I would sue Uber and ask the High Court to grant me a protective costs order so that, in the unlikely event I lost, I would not be personally bankrupted.

"Second, I would seek to advance the claim in a setting where the loser is not liable to pay the winner's costs. To this end, as I explained here, in a recent VAT return I claimed to be entitled to recover the VAT on the Uber taxi ride I took (the “Claim”). I anticipated that, if HMRC rejected the Claim, I could appeal against its rejection and my appeal would be heard in the specialist tax tribunal. Were I to lose I would not have to pay HMRC's costs. And if I won it would be because a specialist tax tribunal had decided that Uber was charging VAT and – in such circumstances – HMRC would have no alternative but to act in the public interest and collect that VAT.

My application for a protective costs order was due to be heard on 13 November 2017. On 10 November 2017, and after some chasing, I finally received a meaningful response from HMRC to the Claim. That response is not a model of clarity but I believe – it is not possible to be certain – that it amounts to a rejection of the Claim and is a decision against which I can appeal to the tax tribunal. A consequence of having an appealable decision in the tax tribunal is that the High Court would be unlikely to grant me a protective costs order. With that in mind, I agreed with Uber that my application for a protective costs order should be adjourned. If the tax tribunal disagrees that I have an appealable decision then I will, of course, pursue that application.

"What does all of this mean? It means that I can, I believe, pursue without costs risk in the technical tax tribunal the contention that Uber is dodging VAT.

"I will lodge an appeal against a rejection of the Claim to the tax tribunal in the coming week and push for the earliest possible hearing." 

It seems the wheels of justice are gathering pace against Uber in the UK,  how Uber react to this latest potential stumbling block remains to be seen at the moment.